Google Completes Motorola Mobility Purchase

By Jeff Gamet

May 22nd, 2012 10:23 AM EDT

Google completed its purchase of Motorola Mobility on Tuesday. The deal cost Google some US$12.5 billion and now makes the Internet search giant responsible for the patent infringement lawsuits Motorola was dealing with before the buyout was complete.

“I’m excited to announce today that our Motorola Mobility deal has closed,” said Google CEO Larry Page. “Motorola is a great American tech company that has driven the mobile revolution, with a track record of over 80 years of innovation, including the creation of the first cell phone.”

Google wraps up purchase of Motorola Mobility

Google and Motorola Mobility announced the buyout plan in August 2011. At the time, Google’s CEO said at the time, “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.”

The mobile device maker has been losing money and reported a fourth quarter loss of $80 million in January. The company shipped 5.3 million smartphones and 200,000 tablets during the quarter, but didn’t say how many of those devices were actually sold to customers. In comparison, Apple shipped 37 million iPhones and 15 million iPads during its fourth quarter.

Google will now have to deal with lawsuits like one in California where Apple accused Motorola Mobility of trying to make the company pay licensing fees for Qualcomm components that are used in the iPhone. Apple claimed that Qualcomm already paid appropriate licensing fees for the parts and that it shouldn’t have to pay again.

As part of the buyout, Motorola Mobility CEO Sanjay Jha is stepping down and is being replaced by Dennis Woodside.

With the Motorola Mobility purchase complete, Google has officially grown from an Internet search and advertising company to a company that controls part of the mobile device hardware market.